16 October 2014
yes, IT dept. can proceed for prosecution when the case is pending before ITAT. Though it is not clearly mentioned in the IT act but can be justified with the below case law though an old one but reliance can be placed on the same:
R OCHHAVLAL AND COMPANY VS. CHIEF COMMISSIONER OF INCOME TAX CENTRAL
It is pertinent to note that CBDT has issued instruction no. 1335 of CBDT, dated 28-5-1980 to the effect that prosecution should not normally be proposed when the amounts involved are not substantial and the amount in default has also been deposited in the meantime to the credit of the Government.
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